Vestas is a Danish wind turbine manufacturer. The stock has been consolidating as of this year, however, it could break higher later in the year as Europe pledges to go g

Vestas Wind Systems is a Danish manufacturer of wind turbines. The company has seen high growth between 2012 and 2021 growing 4,488%, but is currently down 35% from the highs seen in 2021. This stock is available in Euros for about €27.20 at the time of writing. The stock has seen a tough ride recently due to rising costs of production, however, despite this being an issue in the short term, the now new pledge for Europe to come off as Gas and oil from Russia means the EU needs to find an alternative source of fuel and build on it fast. There is no doubt that Vestas as a result of this is going to see an increase in demand for its products over the next 10 years, making this stock look very promising once the Russia-Ukraine tensions relax a little.

From a financial aspect, Vestas is very strong. The full annual report can be found here. The total market cap sits at 27.1bn. Total revenue for 2021 was €15.59bn, with a profit after tax of €176m. In 2020 total revenue was €14.8bn with a €771m profit after tax. Looking at the balance sheet, cash on hand was €2.42bn with total assets sitting at €19.7bn. That’s a total improvement of €1.54bn year-on-year. Total liabilities sat at €14.95bn, up €1.49bn from the previous year. Overall things are worse. Revenue has improved, but margins have shrunk massively and the balance sheet has expanded, but assets only outweigh debt increase by just €6m. Leaving it more debt-ridden.

From a technical aspect, the chart looks somewhat positive after today's 8% rally. The stock looks to break towards the upside. RSI reads 61.7. It will be a slower-moving stock, however, it is well established in renewable technology. Initial support below sits at €27, followed by €25.16 and then the lows of €21.68. This will likely be the floor. Towards the upside, initial targets are €32, followed by €36 and then €38.31. A break above here could take Vestas much higher.

While the financials are mixed and show a more negative pressure, it’s likely that this will only be short term as the costs of production rise for everyone around the world along with living costs. The effects of this are already been seen as it’s eroded the profit and the assets of vestas throughout 2021. That being said, its industry would give a strong indication that upside seems possible from the environmental point of view. Europe wanting to cut gas and oil from Russia simply means more renewables and vestas is the market leader. The technical chart points to some consolidation, but once things improve on a global economic scale, it’s likely the chart will reflect that.